3 Reasons Why You Should Consider Investing In Asia
Updated: Oct 15, 2020
The Asian Century has begun.
In just a span of 20 years, the Asia markets had grown tremendously to a point where it has become a core component of any investor’s portfolio. From 2000 to 2020, the MSCI AC Asia Ex-Japan Index had provided investors with a net yearly return of 9.00%.
Moving forward in the next 10-20 years, the Asia region is positioned for further growth, and here are three reasons why you should consider investing in an Asia Portfolio.
1. Asia will account for 60% of the global growth
If your focus as an investor is on wealth accumulation and growth acceleration, Asia is a market that you cannot neglect as, by 2030, 60% of the global economic growth will be derived from Asia.
That being said, focusing your investments in the Asia region will provide you with a higher expected return rate that you need to accelerate your wealth accumulation goals as opposed to investing in regions that are near the peak of their growth trajectory (i.e. developed markets).
2. The rising middle class will drive consumption and economic growth
A key driver of economic growth and prosperity lies in the market participant’s ability to consume as it has a direct impact on company earnings.
Previously, the economic growth of Asia has been stalled by high poverty and low consumption rates. However, things are gradually changing for the better as today, Asia accounts for over 40% of the global middle class. By 2030, Asia is estimated to account for over 50% of the global middle class.
With an increase in the middle class and consumption rate, Asia’s economy will be expected to grow and prosper as business activities pick up thereby creating more jobs that further contribute to the economic growth and prosperity of the region. This would ultimately translate to higher profitability for businesses and investors like you and me.
3. The growing working population will drive regional GDP growth
Unlike the developed regions which are troubled with the issue of an aging population, the working population in Asia is relatively young (average age: 30.7) and growing.
This is exceptionally important as the direct contributors to the gross domestic product of any economy is the size and productivity of the working population.
Having said that, Asia is positioned very nicely as we have both a growing working population as well as an increasing technology adoption rate. Moving forward, we can expect the Asia region’s Gross Domestic Product to continue growing and eventually overtake the rest of the world.
Similarly to consumption, having a higher production will ultimately translate to higher profitability to investors like you and me as the business thrives under such an environment.
What does this mean to you?
If you are an investor who is focused on wealth accumulation and growth acceleration, you cannot neglect the importance of Asia and its growth potential.
Investing in Asia today is like investing in Singapore or the United States 50 years ago. Essentially, what we are trying to do is to capture the economic growth and prosperity of Asia as the region develops and catch up with all other developed regions.
Imagine being able to participate in the economic growth of Singapore – not as an employee but as a business owner – when we transit from a third world to a first-world country. That is what we are trying to recreate by investing in a portfolio that focuses on Asia.
How can you do it?
Moving forward, here are two ways you can do it. The first is to do your own due diligence to construct a portfolio and manage it on your own. Naturally, this will be very time consuming and technically demanding.
Secondly, you can invest in a ready-made portfolio that is created and personally managed by me. By engaging in my services, you will be able to:
Free up the time needed to do your own research and management
Avoid costly mistakes that you would originally make if you do it yourself
Ensure an alignment between your investment portfolio and financial plans
To find out more about how you can leverage my investment planning services, you can get in touch with me directly:
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Daniel is a Licensed Independent Financial Consultant with MAS and a certified Associate Wealth Planner that provides advice in the following areas:
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